In an effort to help financial planning firms meet the challenge of embedding diversity, equity and inclusion in their business practices, the CFP Board has released a thought-leadership paper as a blueprint for action for much of the industry.

“Metrics That Matter” presents deep dives by five experts and practitioners who illustrate the need for and use of meaningful metrics in establishing goals and evaluating success in DEI efforts, whether a firm is just starting out or searching for a way to measure work already accomplished.

“You can only start from where you are,” said Dawn Harris, the CFP Board’s director of diversity and inclusion. For Harris, the paper, released last week, represents a cumulation of more than 20 years of work in the field of DEI. “I hope firms will use this as a guide. Any organization, any size, no matter where they are in their journey—they have to have leadership engagement for this to make an impact. Having one or two people assigned to DEI isn’t going to do it.”

To that end, the first article, written by Ella Bell Smith, a professor of business administration at Dartmouth College, dissects the observable and measurable traits of inclusive leadership, the leadership style that she believes is right for this moment in time.

“Leadership styles often evolve from the coexisting historical moment. Military styles of leading, for example, coincide with times of world wars … and other times of global conflict or turbulence, when soft approaches to leadership would seem inappropriate,” Smith wrote. “In this particular moment, inclusive leadership is gaining traction. At its core, inclusive leadership is about accepting and appreciating differences. It focuses on freeing the workplace from oppressive structures and hypermasculine cultures and creating an environment where employees of all racial backgrounds, genders, sexual orientations, physical challenges, and religious backgrounds can succeed based on their talents, abilities, and skills.”

The traits that are needed by leaders in this quest include self-awareness, visible commitment, humility, awareness of bias, curiosity about others, cultural intelligence and effective collaboration, she wrote, and the measurable traits of organizations are fair treatment, integrating differences, decision making, psychological safety, trust, belonging and diversity.

According to Harris, heightened awareness and commitment are very much pre-requisites for addressing gender, racial and ethnic gaps in staffing, training, compensation and recognition. And unlike a non-stop flight from California to New York, improvement is not a direct line with a finite point.

“It’s a work in progress,” she said. “It’s always something that needs to be addressed and evolved. Along the way you have to be able to acknowledge that you don’t have it right just yet.”

That certainly was the experience of Laura Barry, a CFP with Wealthspire Advisors, who contributed the article, “Starting a DEIB Journey.”

Barry said the experience of using metrics in evaluating her firm’s DEIB efforts (the B adds “belonging” to Wealthspire’s mission) made it glaringly obvious that while the firm had done a lot in gender diversity recruitment and advancement, racial and ethnic diversity were lagging.

Wealthspire was, in some ways, an ideal firm at which to launch a serious effort at DEIB, as it was “created” in 2019 through an acquisition that brought two groups of otherwise unrelated people together, she said. “After a lot of initial integration noise having to do with our servers and email, we all met to go through a facilitated process to come up with and articulate what we wanted our culture to be,” she said.

That was January 2020, and the newly minted Wealthspire leadership had established six cultural beliefs to guide the firm. Soon after, that new culture was severely tested by the COVID-19 pandemic and the murder of George Floyd.

“For us, the history of our firm really coincided with the whole summer of 2020,” Barry said. “We couldn’t see the headlines about disparities and not see that reflected in our company. What was most challenging was deciding where to start. It felt like sipping on a firehose. There was just this explosion of material and voices, and while we could bring our expanded perspective to work, that’s different from expanding a work perspective.”

The three other contributors to “Metrics That Matter” include Stefanie Johnson, associate profession at CU Boulder’s Leeds School of Business, who wrote “Framework for Metrics.” Her article identifies the four lagging and four leading indicators in diversity metrics and offers guidance on how to use them.

Lisa Shalett, CIO and head of the global investment office at Morgan Stanley Wealth Management, explains “DEI Signal,” a new metric that Morgan Stanley is using to monitor asset managers’ progress on DEI and to help the firm make investment decisions going forward.

And finally, Rachel Robasciotti, founder and CEO of Adasina Social Capital, shows in “Want More Asset Manager Diversity?” how considering new metrics in the due diligence processes can move the needle on DEI without increasing risk.